UK businesses battling huge rise in cybercrime

PwC says not enough companies are dealing with big threat of economic crime and problem of ‘silver fraudsters’

UK businesses are battling a huge rise in cybercrime capable of bringing down entire companies, according to analysis by accountancy company PwC.

In a report that singled out the UK as a hotbed of economic crime, PwC said the threat of cyber offences was now a “board-level issue”, but warned that not enough companies were taking it seriously enough, reports The Guardian.

PwC also warned of a surge in the number of “silver fraudsters” – older staff who turn against their employer.

Approximately 55% of UK firms have fallen victim to economic crime in the past two years, according to the PwC global economic crime survey, compared with a global rate of 36%.

The fastest-growing area of fraud is cybercrime, which made up just 20% of Britain’s economic crime in 2014 but has since jumped to 44%.

The rise has caught firms napping, according to PwC, pointing to its own survey showing that a third of companies have no plans in place to fend off online fraud.

PwC said the increase in cybercrime was partly down to greater use of cloud-based systems to store information remotely.

It also highlighted the “internet of things”, where everyday objects are connected to the internet, potentially opening doors to hackers looking for a chink in a company’s armour.

“Hackers are now more ambitious than ever,” said PwC’s global corporate intelligence expert, Mark Anderson. “Their aim goes beyond targeting financial information to include a company’s ‘crown jewels’ – customer data and intellectual property information, the loss of which can bring down an entire business.

“The threat of cybercrime is now a board-level risk issue, but not enough UK companies treat it that way.”

The risk to ordinary people has been brought into sharp relief by high-profile security breaches at telecoms provider TalkTalk, electronics giant Sony and adultery website Ashley Madison.

John Blamire, chief executive of security and intelligence firm Falanx, warned that such incidents were just the tip of the iceberg. “The volume of attacks can be a strain on resources, but the types of threats are continually evolving, too.”

He warned that UK businesses are not doing enough to develop a talent pool of people equipped to deal with online fraud and other forms of cyber-attack.

“We need more skilled people to help defend organisations from cybercrime and training is a massive part of that. Organisations need to get their house in order and have response plans in place.”

But while PwC’s chief concern in the report was the rise of technology in fraud, it also called on companies to be aware of another potential menace – silver fraudsters. The report detailed a “strong shift towards more senior and experienced employees carrying out corporate fraud”.

It said half of the instances of company fraud were committed by staff aged over 40, while the proportion carried out by staff over 50 has trebled from 6% to 18% over the past two years.

Fraud by senior staff often has the greatest impact, PwC said, because they have access to more sensitive information and are subject to less oversight, meaning wrongdoing is harder to detect and prevent.

Tracey Groves, PwC’s head of ethics and compliance, said companies should improve their security but also “reward, recognise and empower” people to stave off the temptation to commit fraud.

Mounting concern over the rise in online crime has seen the government pledge to spend £860m on a national cybersecurity programme to help businesses be better prepared.

Former defence secretary Liam Fox has also called for legislation to make it a legal requirement for firms to report cyber-attacks when they happen.

David Webber, managing director of cybersecurity firm Intelligent Environments, said any change in the law should be accompanied by “adequate support, to help companies defend themselves against cybersecurity threats.

“Businesses need more education to better understand the threats of cybercrime and how to negate them,” he said.